40. It is not a question of opposition, but
there are many ways of telling the truth.
(Mr Boateng) That is very true. I do think it is worth
recalling that the Northern Ireland Department of Regional Development
has had a 14.8 per cent increase, compared with the 2001-2002
allocation; but it will be of benefit, obviously, to businesses
in Northern Ireland from the 0.1 percentage cut in National Insurance
contributions. That also needs to go into the scales.

41. Perhaps we can turn finally to our conclusions.
Your response in relation to paragraphs 81-83 of our report are
silent, understandably. It really comes down to the Government's
statement of intent for environmental taxation: "AIt must
be . . . without undesirable side effects" You have acknowledged
that there are undesirable side effects for Northern Ireland,
which you have postponed and delayed, but not alleviated, so does
it pass that test of good taxation?
(Mr Boateng) I think that it does because in arriving
at a conclusion as to the impact of any side effects, you have
to make a balanced judgment. You have to weigh up all the considerations
that the Committee have shared with us, and considerations that
I sought to share with the Committee. One has to look also at
the impact over the United Kingdom as a whole. It is not possible
to say that you can be sure of designing a tax that either as
between different sectors or different individuals, or different
constituent parts of the United Kingdom, will have a universal
impact. It will inevitably vary, and you will have to take a balance
and arrive at a judgment. It would be wrong not to proceed with
the tax because in relation to one particular part of the United
Kingdom or one particular sector, it had an impact that was more
adverse than in another part. If you take the climate change levy,
there are certain processes that are disadvantaged by the climate
change levy. They are on the margins, and technically it is very
difficult to devise a solution that will overcome the disadvantage
to which they are put as a result of the climate change levy.
That applies across the piece in relation to environmental taxation.
I do not think that you can have a principle of environmental
taxation that nobody must ever be affected by adverse side effects.

42. I do not think we are seeking that, unless
I am wrong. I am not an expert, but the climate change levy does
not have an adverse effect on one part or another of the United
Kingdom because of its special circumstances of having a border
with another country.
(Mr Boateng) But it does have an effect on some processes.

43. Yes, but that is the same for everyone.
(Mr Boateng) I am merely saying in relation to environmental
taxation generally that in applying the principles, to which you
have quite rightly drawn our attention, you have to look at the
whole piece. You cannot draw out individual aspects of it. We
would find ourselves in some difficultyand this goes back
to the point I made in response to a question by the Reverend
Smyth- if we said in relation to fiscal policy and Northern Ireland
that every development had to be capable of taking into account
the length of the border between Northern Ireland and the Republic.
We would be in some difficulty if we wanted to do that. What I
draw from this whole experience is that in research and preparation,
you need a fuller knowledge and a fuller research base than we
had in terms of the introduction of this tax. That full knowledge
has to include Northern Ireland and its special circumstances.
That is what I draw from this particular saga. If I may say so,
Mr Matesas this is the last questionthe Committee
has played a very important role in bringing us to that conclusion.

44. We are grateful. This is not meant to be
overtly hostile: I can just see what happened, because I have
some experience of these things in your department: the penny
dropped that there was a problem. You had to consider what you
did and one of the options was to say, "we could take Northern
Ireland out of this", whereupon someone said, "oh, that
is going to set a precedent; they will all want it for every tax
there is". We have tried to point out, I hope in very reasoned
language, in these five bullets in paragraph 83, the undesirable
effects which make it, in terms, not good taxation; and that the
fact of the land border and the location of the quarries and the
manufacturers, does make it a special case. Therefore, it need
not set a precedent for others. By taking an option which you
thought would make the problem go awayI am not trying to
put words in your mouth"let us phase it in over five
years and we will probably get away with this"I know
how governments workand this is not a party pointyou
are not facing the peculiar problems. They will still be therenone
of them in the first year, thanks to your alleviationsome
in the second, and probably breaking even in the third; and after
that, everything we have reported will be there in full view:
the development, the regeneration of Northern Ireland, and the
problems of enforcement, have not gone away. Therefore, while
you have alleviated the problem, you have in no way solved it.
Would you say that is unfair?
(Mr Boateng) We may not be at one as to the gravity
of the impacts that you have described in that paragraph, but
what we are completely at one about is a determination to make
sure that the future decisions that are made in relation to this
tax, within the context that we have outlined of the phased introduction,
will be formed by objective research into the particular conditions
that apply in Northern Ireland.